Thursday, May 12, 2005
LET’S DO IT BECAUSE, WELL . . .
I Give Up
Let’s go ahead and do it because, well, it’s in the interest of, I don’t know, I give up, but I’m guessing almost nobody (“United Air Wins Right to Default on Its Employee Pension Plans,” by Micheline Maynard, New York Times, May 11):
United Airlines, which is operating in bankruptcy protection, received court permission yesterday to terminate its four employee pension plans, setting off the largest pension default in the three decades that the government has guaranteed pensions. […]
The ruling releases United, a unit of the UAL Corporation, from $3.2 billion in pension obligations over the next five years. The federal agency that guarantees pensions, the Pension Benefit Guaranty Corporation, will assume responsibility for the plans, which cover about 134,000 people.
Some retirees could see sharply lower pension payments as a result; others will see little change in benefits, depending on a variety of factors. Some retirees at US Airways, which has terminated its plans, have seen benefits drop by as much as 50 percent. […]
Along with raising that prospect, yesterday’s action has significant implications for the airline industry, which has lost more than $30 billion since 2000, and perhaps for other industries like automobiles, with similarly heavy legacy costs.
Analysts have predicted that if United won its case, there could be a domino effect as other airlines are forced to seek bankruptcy protection to bring their pension costs down to United’s levels.
That move would probably swamp the pension agency, which was created in 1974.
Oh, wait, according to the Times report there are at least two potential beneficiaries, namely General Electric Co. and American Express Corp., major short-term and junk lenders to Delta Air Lines, which is expected to follow its competitors in saddling the PBGC and American taxpayers with the results of what can only be described as pathetically inadequate management. Aw, what the hell, just blame the unions, right?
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JAMES MARTIN CAPOZZOLA
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James Martin (Jim) Capozzola launched The Rittenhouse Review in April 2002, TRR: The Lighter Side of Rittenhouse, HorowitzWatch, and Smarter Andrew Sullivan in July 2002, and Bulldogs for Kerry-Edwards in October 2004. He is also a contributing member of President Boxer.
He received the 2002 Koufax Award for Best Post> for "Al Gore and the Alpha Girls" (published November 25, 2002). Capozzola's record in the Koufax Awards includes two additional nominations for 2002 (Best Blog and Best Writing), three nominations for 2003 (Best Blog, Best Series, and Best Writing), and two finalist nominations in 2004 (Best Blog and Best Writing).
Capozzola’s experience beyond the blogosphere includes a lengthy career in financial journalism, securities analysis, and investment research, and in freelance writing, editing, ghost-writing, and writing instruction.
He earned his bachelor's degree in political science from the University at Albany and a master's in foreign affairs from the University of Virginia.
Capozzola lives in Philadelphia with his bulldog, Mildred.
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